Exxon (XOM) earnings Q3 2020

A view of the Exxon Mobil refinery in Baytown, Texas.

Jessica Rinaldi | Reuters

Exxon Mobil reported its third straight quarter of losses on Friday as depressed oil demand sparked by the coronavirus pandemic weighed on the company’s operations.

During the third quarter the company lost $680 million, although Exxon said results improved on a quarter-over-quarter basis thanks to “early stages of demand recovery.”

On an adjusted basis Exxon lost 18 cents per share during the third quarter while generating $46.2 billion in revenue. The Street was expecting a 25-cent loss per share and $46.01 billion in revenue, according to estimates from Refinitiv.

During the third quarter a year ago the company earned 75 cents per share on $65.05 billion in revenue. During the second quarter of 2020 Exxon lost 70 cents per share on an adjusted basis, while revenue came in at $32.61 billion.

“We remain confident in our long-term strategy and the fundamentals of our business, and are taking the necessary actions to preserve value while protecting the balance sheet and dividend,” said Darren Woods, Exxon’s chairman and chief executive officer. “We are on pace to achieve our 2020 cost-reduction targets and are progressing additional savings next year as we manage through this unprecedented down cycle.”

Exxon previously announced a reduction in its capital spending program — from $33 billion to $23 billion — and the company said it’s ahead of schedule due to increased efficiencies and a slower project pace, among other things. The company is targeting between $16 billion and $19 billion for its 2021 capital program.

Exxon said Thursday that it intends to reduce its U.S. staff by around 1,900 employees, with global workforce reductions potentially rising to as much as 15%. As of the end of 2019 Exxon had a global workforce of 88,300, which included 13,300 contractors.

As oil and gas companies continue to grabble with the ongoing demand loss from Covid-19, some companies have announced dividend reductions in an effort to slash costs.

Exxon has repeatedly said that its dividend remains a priority, and on Wednesday the company maintained its fourth quarter dividend at 87 cents per share. But it was the first time since 1982 that the company didn’t raise its payout. The company currently yields 10.56%.

Research firm Edward Jones noted that there’s an increasing risk that Exxon will have to cut its dividend in 2021 if demand doesn’t fully recover.

It’s been a difficult few months for Exxon. In August, the company was removed from the Dow Jones Industrial Average. Chevron also recently surpassed Exxon for the first time to become the most valuable U.S. energy company based on market capitalization, although Exxon’s current market valuation is greater than Chevron’s.

Shares of Exxon were down 1% in premarket trading on Friday. For 2020 shares have declined 52%.

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